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That’s it? Only $810.8 million? Not even a whole billion? I would have thought Eloqua would command a higher price, especially with a market cap in the $4-500 million range. Lots of people are saying nice things about the deal but I ain’t buying it just yet.

They IPO’d in August at $11.50 per share and raised $90+ million and in the last year had revenues of about $85 million. So from this perspective the strike price of $23.50 makes some sense. However, marketing automation is heating up and it’s a good place to hang out a shingle these days so I would have expected more of a premium.

This leaves Marketo and a bunch of smaller companies in the space and curiously opens up the market quite a bit. Eloqua is a good Salesforce partner but you have to wonder how much longer that will last given that Larry doesn’t even invite Marc to OpenWorld any more.

I think Eloqua’s Salesforce business goes in the tank immediately meaning that Oracle might have over paid given Eloqua’s revenue is somewhat dependent on good relations between the two companies’ sales forces. So look for Marketo to get a lot more interest from Salesforce (as if they don’t have enough?).

This acquisition clears the field for Salesforce and I could easily see Marc buying Marketo just to make sure he has something in the corral. If that doesn’t happen, then every SAP and IBM in the world will want Marketo and soon. Marketo would be a good fit for Salesforce, better than Eloqua in some respects, given the social direction of the Marketing Cloud.

At this stage Oracle is amassing an impressive string of software solutions that it is attempting to forge into some kind of suite. But maybe not. This reminds me that the last couple of years worth of Oracle acquisitions in the front office market resemble another spate of acquisitions the company embarked on in 2004-2005. It ended up buying such names as PeopleSoft and Siebel and each of those companies had bought up many other companies like J.D. Edwards and Upshot to name just two. I think of that as the Great Consolidation. Lately things are looking similar.

Seven or eight years ago Oracle was chided for becoming the new Computer Associates and it was widely expected to cease all development and enhancement of the products and just collect the maintenance revenue stream. That didn’t happen, the company pledged to keep the brands going and today they are. It also promised to build powerful software that would link everything together in one big, happy mass. The project was supposed to take 3 years but it reached double that before Oracle threw up its hands and declared victory in a parallel universe.

Fusion is still evolving and the separate applications are, well, separate. But the focus now seems to be on bringing together RightNow, Siebel, ATG, Eloqua, and the other recently acquired systems under the Fusion umbrella. Maybe it will work, I dunno.

For now, Oracle may have stolen first base buying Eloqua. The marketing market is still hot, Salesforce is committed to big time social marketing, Marketo might be a target purchase for them but that’s not certain. Sooner or later Oracle needs to put some stories together about how its new applications all work together otherwise the CA rumors will start all over.

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I went to Oracle OpenWorld as a guest of Oracle and came away with a variety of observations that I can share. Some of what I saw was under NDA and that will remain undisclosed though I have to tell you that I did not see any labs or next generation products beyond what my colleagues saw at the show. My secret experiences revolved around customer stories. I also went to an America’s Cup qualifying race as a guest and had a great time on San Francisco Bay. The only reason that matters is in case you think I’m cutting Oracle some slack. I won’t do that but I will say that I was treated well all week, thanks to the efforts of Susie Penner, who runs the influencers program and does a bang-up job, and others.

Some of my colleagues were grumbling, and perhaps have done so in print, that they didn’t get enough time with executives — or any at all in many cases (me included) — and that their experience was diminished by the lack of a good séance. I can only observe that with 50,000 or so customers and press in town your executives can only be spread so thin. More importantly, I have always found that when I call up I can speak with the person I need to find plus or minus some obeisance to the gods of Wall Street and the public company’s quiet period. My take on meeting with executives is to make a call when I need information and not to expect so much from a conference like this. To that point we had a good meeting with executives and product managers in May when Oracle held an analyst day.

I must also say though that the company makes an unnecessary distinction (my humble belief) between an analyst and an influencer. Analysts seem to get greater access and are sequestered from the influencers in part because they work for brick and mortar analyst firms while people like me who are analysts, bloggers and occasionally journalists, get lumped into a separate but equal program. But, as I say, I can always pick up the phone.

As a CRM guy, the show was a bit light on information and the impression I have is that Oracle is only two or three years into a transformation that starts at hardware and moves steadily up its stack to applications. The hardware announcements at OpenWorld were superb and I can see a bright future for all of computingdom (a new technical term to be sure and evidence of continuing innovation in Silicon Valley) with Oracle’s devices. But I have been saying this for three years.

Each year the Exa-hardware line (Exadata, Exalogic, Exalytics) gets more robust. This year the company finally aimed Exa-hardware squarely at cloud computing to claim a spot as a serious infrastructure supplier. It also announced a new version of the database (Oracle 12c) for its public/private/hybrid cloud strategy to complete the picture. I am not much of a fan of private clouds because they seem oxymoronic, like jumbo shrimp as Steve Martin used to say. But for many, the idea of a private cloud is what will finally get them to cloud computing and sooner or later true cloud computing will break out as hybrids die a natural death. But also, I see great gains for sustainable computing with these announcements and with them lower operating costs for users.

The private cloud, seen for what it is, is a transition state. Neither fish nor reptile, it is an amphibian capable of adjusting to multiple surroundings and it will be the parent of something better adapted to an energetically more stringent environment. This is the greatest differentiator between Oracle and all of its much further progressed competitors in the cloud in my opinion.

Oracle has hundreds of thousands of customers and most of the biggest companies in the world use its products. It will not turn on a dime and it will need to support its customers and their older products for many years as they transition to cloud computing. So, Oracle’s strategy cannot be the same as a pure SaaS player and I believe the two should not be directly compared without caveat. In fact, I think Oracle’s next big innovation will not be hardware or software related. It will focus on the high-wire act of changing its business model to subscriptions while encouraging its customers to do the same all while running full tilt into the future — just what you’d expect from a company headed by a yachtsman captivated by speed.

I was not impressed by the front office applications and they fell into three buckets – new product acquisitions, existing products i.e. those bought in 2005 and Fusion. The products that Oracle bought last year are all up and running as they were when they were purchased but they are only lightly integrated, I think. The glue that is supposed to hold them together was hardly in evidence. I am talking about Fusion. Whatever Fusion is going to be is still in the future as far as I can see and I can’t say much more than that because I didn’t get to see much. The older applications are quite literally getting older and the race is on between them and the new acquisitions to see if the new apps can spin up quickly enough. Fusion is a very important of that dance.

On the other hand the company has adopted RightNow’s customer experience or CX mantra completely and did a reasonably good job of introducing its customers to those social ideas. Unfortunately for me — and many of my colleagues who have been swimming in the social soup for many years now — Oracle’s CX Summit was aimed at its legion of neophyte customers. There’s nothing wrong with that. It accurately shows where everything and everyone is relative to social. But the net effect of it all is that we didn’t see behind the curtain and didn’t get a glimpse of what’s ahead in social for Oracle.

We did hear about the importance of social networking and collaborating and how Oracle Social Network (OSN) fills a void etc., etc. But I have profound doubts. I consider social as a recently blank canvass, which has been filled by things like Twitter, Facebook, LinkedIn and, yes, Chatter. In each case, creative types tried to paint it with transcendence and visions of what can be. Then consider OSN, a plow horse of a name that says “we checked off another box,” and you get an inkling of where Oracle is in its social rollout.

On applications, my net impression is that Oracle has not yet generated a lot of thought leadership. There are times when thought leadership is not as valuable but we are at a crossroads and the signs point to cloud, social, mobile and all of the above. The Oracle messaging was long on “here are the facts about our new products” but relatively short on the part that says “and here’s why that’s important to you in today’s economy/market place/world” pick one. Oracle wants to be the go-to technology business partner but to achieve that goal in a new generation they need to throw some fastballs down the middle of the plate. Every year I see progress and maybe next year they’ll get the thought leadership. It will be vitally important as the company moves not just into the cloud but more and more into the subscription economy and expects its huge customer base to follow suit.

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This week Zach Nelson, CEO of NetSuite, a.k.a. Larry’s other company, took over the Marc Benioff chair as guest antagonist but given the relationship between the companies the vibe was more sedate. For instance, no one went to the talk at the Lam Theater in Yerba Buena Gardens wondering if Nelson would be controversial or if he would utter the words, “We come in peace,” as Benioff once had. That much was a given.

Nonetheless, Nelson served roughly the same purpose as Benioff; he was the emissary from the cloud. He functioned as a third party thought leader pointing off in a future direction that Oracle itself could not for various reasons. Nelson’s direction and his talk cemented one of the key elements of cloud computing for large enterprises contemplating — what to do about the growth of increasingly expensive and hard to maintain ERP systems. In an era where data and decision-making are continuously being pushed down the chain of command conventional on premise ERP has a flexibility problem and that was the subject of Nelson’s talk.

For at least the last year various vendors have been talking about their two tier strategies in which they provide a second layer of ERP support or they cooperate with other vendors to do so. Nelson used his time to describe the advantages of using a product like NetSuite in a variety of ways that demanded a second tier of ERP.

For instance, a large multi-national company might use a second tier of ERP systems to capture local or regional data, convert currencies and adhere to local regulations before rolling the results up to corporate in a more tidy bundle. The two tiers could in practice be all NetSuite but Nelson’s point was to also support heterogeneous environments in which Oracle or SAP might be the corporate standard.

Finally, an question that is on lots of minds during a merger, acquisition or sale of a division is what to do about the financials. I have to confess that this is not top of mind for me but I can understand how it can be for the principals. Nelson’s point is that his product, by virtue of its cloud residency, can spin up a company very quickly and enable the separation or merger as the case may be.

The two tier strategy is a happening thing and I expect that we will hear more about it over time and not just from ERP vendors. Much the same argument could be made for front office conversions. As multiple conventional CRM systems begin to age out we might see SaaS CRM vendors trying to ease the transition for their own products.

Finally, two tier provides other benefits to companies such as limiting the growth of conventional ERP and initiating a transition that will move some to the cloud eventually and away from big ERP systems. That’s what Oracle can’t say on its own because as much as it would like to surround SAP systems with NetSuite and eventually convert them, it would not like to see the same thing happen with, say, Microsoft ERP surrounding and ultimately ejecting Oracle from an account. NetSuite has an inside track right now because it runs a complete Oracle stack which will make conversion easier while keeping it all in the family.

Zach Nelson’s talk was a success. He presented an appealing vision of ERP in the cloud and for that I think it’s a lock that he’ll be invited back.

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Under more normal conditions I react to blogs on a low key basis. If I like something I might not even mention it and the same is true if I dislike or disagree with one. The blogosphere is a big place and it is unproductive to be running around all day saying “Yes, I like this” or “No, not so much.” But I am grateful that so many of you read and even comment on what I post.

However, when a vendor weighs in on an official site and clearly makes a statement that I think is wrong and or self-serving, I feel a need to provide a counterbalance. Earlier this month Meg Bear, Vice President, Oracle Cloud Social Platform posted, “Multi-Tenancy and Other Useless Discussions” and from the headline I think you know where this is going.

The whole multi-tenancy debate of the last decade has been run by the same logic that a five-year-old uses at dinner — don’t let the peas touch the mashers or the chicken! Ironically, the chocolate syrup does indeed touch the vanilla ice cream and that is socially acceptable, but I digress.

According to Bear, the debate is no longer relevant not because we have all grown up and understand that, just as a bank co-mingles everyone’s money keeping yours separate from mine by use of metadata (account number, balance, statement, things like this), our data can be co-mingled without worry about cooties. No! Bear’s rationale is that Oracle has a superior “modern application architecture.”

Can we please be serious? I beg to differ for the following reasons.

IT is over. Note I didn’t say finished or in any way imply irrelevant. IT is over as a disruptive innovation and driver of the economy. Some macroeconomists who study the long economic wave a.k.a the Kondratiev Cycle have begun noting that the IT wave is over — just look at the economy today and you know this. IT is the economy in much the same way that cars and petrochemicals, once big drivers in their own right, are the economy. They don’t grow a zillion percent any more and now neither does IT. Over, finito, gonzo. Bring on the next Kondratiev Cycle, please, and hurry up!

But quickly back to Ms. Bear. IT is rapidly commoditizing — that’s the real message of cloud computing. The cloud frees up budget once spent on hardware for more productive pursuits. Under those conditions, dedicating spindles that remain half empty for everybody’s peas, mashed potatoes and chicken and dedicating separate database instances is both wasteful and unprofitable for the vendor. It also doesn’t seem very modern to me.

So what is the point? Apparently it’s business value as in the value the applications enable the business to realize through their use. But according to Bear, multi-tenancy is not an enabler by, say, enabling greater throughput, faster processing and quicker searches over fewer spindles; things like that, because multi-tenancy doesn’t matter.

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In a blow to the software licensing paradigm and intellectual property rights everywhere, the European Court of Justice said that it was OK to resell a software license once you are done with it. The case involved Oracle and a European company UsedSoft, which had made a nice business of reselling the licenses. The story is reported here at Dow Jones by Vanessa Mock.

It really boggles the mind that such a court could redefine intellectual property rights in such a fundamental way. Furthermore, I could understand, though not accept, it if this action came from North Korea or China where pirating is an open secret. But to have the European Court of Justice come up with such a boner leaves me just shaking my head.

It’s almost as if medieval law was resurrected and rather than indenturing people to the land, it now indentures technology companies, and probably many others who provide licenses rather than products, to slavery.

This might be a boon to the subscription economy. In that model there is no doubt about who owns the software and the terms of use.

So, does Oracle in this case have an obligation to continue providing updates to the new owner of record? This is a story that will continue to evolve.

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Oracle launched its customer experience push this week with an announcement by co-president Mark Hurd. The new direction begins to pull together the results of Oracle’s latest buying spree in which it purchased ATG for e-commerce, RightNow Technologies for customer service and other technologies for analytics in cyberspace.

While Oracle will always draw skeptics the way a dog finds fleas, I think at least some of the new direction makes good sense but not necessarily for the reasons stated.

The big push into customer experience leaves much unsaid, especially the idea that customers are increasingly turning off vendors and their messages and seeking out indirect approaches to getting the information and products or services that they need.

The push into social media and especially analytics for gauging customer sentiment is a case in point. People have a natural reticence about revealing too much to a vendor correctly assuming that anything they say in a sales conversation might be later used against them. Fair enough. But people are still remarkably unguarded about what they reveal to their peers and hence the boom in all things social.

However, if you look at the quotes recently put out by Oracle executives they’re really still selling old style CRM with the new label of customer experience. They’re still talking about costs saved and calls avoided because those are the things that make vendors buy and it’s the vendors who are Oracle’s customers — end users not so much.

The strategy is smart because we are in an era of severe cost cutting and not simply for the usual economic reasons. First off, and I have been saying this since 2007, companies like Oracle have to deal with the fact that energy and transportation costs are escalating making it harder for vendors to visit customers at a profit as well as more difficult for consumers to visit the mall. This is the age of indirect selling for both these reasons.

But add on the idea that the economy has not grown in real GDP terms since 2008 and you see another dynamic. A whole generation of people is trying to launch into life and finding it very difficult to form households. Without household formation things like carpets, refrigerators, sofas and maybe even cars are not being bought in the numbers they would be under other circumstances.

In this age of austerity and stagnation, increasing profits to produce the illusion of growth comes from reducing overhead and avoiding margin gobbling expenses like conventional selling. So you get things like this strategy of customer experience. It makes sense to me and positions Oracle and a few other companies in a leadership position so good for them on that.

I also noticed though this curious line in a fine article by Chris Kanarkus of IDG News discussing the Oracle announcement; “Larger companies such as IBM, Adobe and Salesforce.com are also building out CEM portfolios. None of them can compete with Oracle’s breadth of technologies, [Anthony] Lye maintained.” Of course, Anthony Lye is senior vice president of CRM at Oracle and the architect of the CEM or CXM strategy. He was the guy buying up the CEM companies last year.

I found it interesting that Salesforce was lumped into the “larger companies” rubric with IBM and Adobe. Oracle and Salesforce sometimes act like two Tomcats in a cage but keep in mind that Salesforce has yet to crack the Fortune 500 though it is making strides. At any rate, this looks to me like an attempt by Oracle to set up some competitors for easy knockdown rather than something more substantial on the product front. I don’t really understand the Adobe reference and while IBM has lately made strides in CRM and analytics the efforts seem directed elsewhere.

As for Salesforce, their efforts are in the enterprise with collaboration and highly socialized applications that are increasingly penetrating new niches. The Salesforce strategy resembles Apple’s and both riff off the idea of a “Blue Ocean Strategy” that was subject of a book by the same name.

If I had to sum it up, and I do, I’d say we’re at a point in time when the market is splitting up and rather than the monolithic approach to social that we’re seen since the middle of the last decade, companies are developing specialization. So we see Salesforce focusing on enterprise IT in the true cloud, and Oracle focusing on the vendor-customer transaction while others are carving out their own niches. Yes, Oracle has a cloud strategy too as well as a hardware division.

So it’s the age of austerity, of reduced personal outreach and increasing relationships with and through machines and we now have the technologies to support the zeitgeist Eventually, growth will be back on the menu. Even Lent only lasts a short time.

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A door closed this quarter and another opened. We’re now oriented on a new computing paradigm that will serve us for the rest of the decade. There is now broad agreement on the big IT issues of our time and they can be summarized in the Four Big Buzzwords mobile, social, big data (and analytics) and real time.

We’ve been bantering these words around individually and in groups but in Q2 2012 most vendors came to a tacit agreement that these would be the issues around which marketing campaigns would orbit for the intermediate future. Since Oracle’s CEO Larry Ellison is the original proponent of decadal cadence I will use his company as the measure of the short timeline that brought us to this moment.

April 2009. Oracle buys Sun Microsystems. The purchase of a failing Sun was seen as a retrograde effort. The conventional software company buys a conventional hardware company and many of us expected them to fade into the sunset together. It didn’t go that way.

September 2009. In an interview at the Churchill Club Ellison said that cloud computing was a bunch of hot air. Less sincere words have rarely left his mouth as subsequent events would prove. No matter that by then, Ellison disciple Marc Benioff had already built a billion dollar business offering nothing but cloud computing as a delivery mechanism. The prior decade bred an entire industry devoted to cloud computing and multi-tenancy but no matter. Ellison had the database that drove these cloud companies and not much else. He also had a huge installed base dedicated to conventional on-premise computing, so he was a late arriver intent on making up ground. The first step might have been this bit of indirection.

OpenWorld 2009. Oracle announced a new strategy and line of hardware starting with Exadata a huge database server with monster truck-like capabilities for serving data and crunching it into submission ten times faster than conventional technologies. Exadata was followed by Exalogic, a compute server and Exalytics an analytics appliance. There were other things too. Before long little boys playing in sandboxes had traded their toy trucks, backhoes and other construction paraphernalia for Exatoys and Oracle had announced its engineered systems strategy. Ok, I made that up just to see if you are still with me.

2011 Anthony Lye plus Oracle’s checkbook proved to be a potent combination as Lye developed a vision of Fusion driven applications and business processes of tomorrow. Lye bought five companies proving that while you might not be able to buy love you can certainly buy R&D. By the end of 2011 Lye had purchased ATG (ecommerce), RightNow (customer experience, service and support) Endeca (ecommerce and business intelligence), FatWire (web content and web experience management) and Inquira (service knowledge management software). The combination, when knitted together positions Oracle as a contender in the Four Big Buzzword Categories.

But it wasn’t just Oracle that was making moves. As early as late 2010 Microsoft and then others began preaching a gospel of multi-tier ERP, a strategy that would keep existing ERP systems and their pricy maintenance contracts in place while providing much of the new functionality required by the Four Big Buzzwords through a second tier of ERP from up and coming players like NetSuite and Zuora.

The approach ended a potentially disruptive moment for ERP vendors and their customers who were beginning to contemplate rip and replace on a scale not seen since four digit date formats were all the rage. But beware ERP vendors, you are being surrounded and at some point you will be made irrelevant by the increasing functionality of the second tier and at some point there will be a bloodless coup d’état.

So what happened this quarter is that one ERP vendor after another admitted defeat of a sort. No one any longer pooh-poohs cloud computing (even Ellison) or questions the validity of social technologies in business. It’s all SOP today in what some are calling the post-digital era. Post-digital doesn’t mean we’re beyond it, simply that it’s established fact and beyond debate just like evolution, global warming and a round earth are in most precincts today. Yes, there are laggards who haven’t bought into the message yet but increasingly they are to be pitied, not argued with.

So, as they say in the reality shows, Who’s safe? And Who’s going home right now?

Well, as it happens very few need to go home provided they’re cloud oriented all ready and that they’re at least making noises about the other three Big Buzzwords. Companies entering the market with anything that enhances the two-tier strategy will be welcome and some, like NetSuite, which has announced a defacto three-tier strategy should do fine.

In the years ahead look for the following ideas to gain primacy in business and enterprise computing as the post-digital era gains momentum.

Increasing use of the Four Big Buzzwords. This will show up most obviously in mobility technologies but they will be supported by increasing use of centralized analytics crunching big data derived from social media.

Social will continue to be a big draw, not so much for what we know of social right now but for advances such as gamification that will become key drivers.

Multiple-tier solutions will continue to blur the distinction between on-premise, cloud and single vs. multi-tenant.

We will need to turn our attention to the internet of things later in the decade as machines increasingly talk to machines a la buy more milk, eggs and bread.

The key battleground will become platform and development tools. Increasingly, the goal in business is to project agility through the capacity to change with customer demand. Tools will be important but platform will be key. Platform increasingly is the place where security, social, mobile and all the other Big Buzzwords have to be built in. You can’t add any of them on after the fact.

Platform therefore is key and positions companies like Oracle (Fusion) and Salesforce (Force.com, Heroku, Sites.com, Database.com), NetSuite and others in the catbird seat. Vendors with older platforms rejiggered for the cloud may not fare as well.

So there it is. They’ve figured out what to do about cloud, as inelegant as it might seem, they’ve embraced the big Four Buzzwords and for the next several years, provided the economy holds up, we’ll see renewed competition as different vendors compete on slightly different permutations of a similar story. We can already see Salesforce focusing on the social enterprise, Oracle the customer experience, NetSuite commerce, Microsoft catering to its large installed base with cloud versions of the things it used to sell in boxes.

SAP will do something but it’s still hard for me to figure out what. They’re working with NetSuite according to Zach Nelson, CEO of NetSuite and Business by Design appears to be catching fire. Never a strong marketing presence they need to get an elevator pitch for a small building.

Later in this cycle we’ll begin talking about video and voice embedded in the front office suite. They’re about where social technologies were in 2006 and moving toward the center.